Althea told shareholders it is nearing profitability after cost reductions helped shrink its losses in the first half of FY25, even as medicinal cannabis sales fell sharply.
Prolonged difficulties in its pharmaceutical division pushed half-year revenue down to just A$2 million, compared with $10m in the previous corresponding period (PCP).
Last month, Althea announced a restructure of its pharma operations, attributing the sales decline to "market challenges" and disruptions across its supply chain.
Total revenue for the six months to December dropped nearly 19% to $10.6m, with the figure supported by its recreational division, which posted sales of $8.2m — a 58% increase.
The company recorded a net loss of $1.5m, a significant improvement on the adjusted $9m deficit from the PCP.
Narrowing those losses was aided by the stronger performance of its recreational arm — now the primary engine of the Althea business — alongside cost reductions and the company's exit from the UK market.
Total expenses over the six-month period fell from $21.5m to $6.7m, though H1 FY24 had included a non-cash impairment charge of $7.6m.
Notwithstanding the weak results from its medicinal cannabis operation, managing director Josh Fegan said a lower cost base and an operational model "that continues to improve" had put Althea in a "far stronger financial position".
"While we are not yet profitable, this half-year result demonstrates how close we are to achieving that milestone," he said. "The impressive growth at Peak Processing Solutions is a major highlight, reinforcing the strength of our recreational cannabis strategy and the momentum in our THC beverage business."
Net cash used in operating activities during the period exceeded $3m, and auditors once again concluded that a material uncertainty exists over Althea's ability to continue as a going concern.
